Many businesses accumulate costs for each job performed. Examples of businesses that use a job order costing system include print shops, car repair shops, health clinics, and kennels.
Visit a local business that uses job order costing, and interview the owner, manager, or accountant about the job order process and the documents the business uses to accumulate product costs. Write a paper that summarizes the information you obtained.
Include the following in your summary:
1. The name of the business and the type of operations performed
2. The name and position of the individual you interviewed
3. A description of the process of starting and completing a job
4. A description of the accounting process and the documents used to track a job
5. Your responses to these questions:
a. Did the person you interviewed know the actual amount of direct materials, direct labor, and overhead charged to a particular job? If the job includes some estimated costs, how are the estimates calculated? Do the costs affect the determination of the selling price of the product or service?
b. Compare the documents discussed in this chapter with the documents used by the company you visited. How are they similar and how are they different?
c. In your opinion, does the business record and accumulate its product costs effectively? Explain.